Interview with Graham Levinsohn, Chair and Group CEO, Sureserve
A leading energy services and compliance group serving social housing and the public sector, Sureserve is a key player in the drive towards achieving net zero targets. While it was previously listed on AIM, Cap10 Partners spotted an opportunity to take the business private in July 2023 and brought Graham Levinsohn in to lead the business. I spoke to Graham, the Chair and Group CEO, about finding opportunities in change, balancing energy transition with the needs of tenants, and shifting from a PLC to a PE-backed mindset.
Private equity investors are often attracted to sectors undergoing rapid change, and Cap10’s investment in Sureserve is a great example.
Meeting energy performance targets
As an energy services and compliance portfolio for the social housing sector, the Cap10 investment team predicted the company would be pivotal in the drive to net zero. By shifting its focus to energy efficiency, alongside compliance, Sureserve is ideally placed to help meet government energy performance targets.
“It's a low CapEx area that has typically been underdeveloped, with significant change underway,” says Levinsohn. “The opportunity to re-engineer delivery and introduce new services through expertise, data, and decarbonisation solutions is significant.”
Strong social purpose
For Levinsohn and the investment team, there is also a strong social impact side to the business, which is committed to modernising housing in a way that works for residents. This balance of value creation alongside its focus on customers and people runs through everything Sureserve does.
“We identified an opportunity to help decarbonise social housing, and address fuel poverty at the same time,” he says. “You can switch to more efficient energy sources, but if you don't do it in the right way, all you're going to do is put fuel bills up. Utilising the right process can deliver savings to both the resident and the social housing provider while supporting the net zero targets we are all working towards.”
Central Sureserve brand, local client, and resident focus
Formed through M&A, Sureserve consists of 12 sub-brands that operate at a local level with centralised oversight. On joining the company, Levinsohn was pleased to discover these local businesses had strong leadership, which he was keen to work alongside. However, he and Cap10 quickly identified a need for transformation at the central management layer, to create efficiencies, streamline customer service, and maximise opportunities for energy transition with a focus on eradicating fuel poverty.
“We're on a journey to decentralise decision-making and maximise entrepreneurial leadership at a local level, keeping operational delivery and customer ownership close to the customer. But where it makes sense to do things as One Sureserve, we will,” he says.
Bringing clarity and cohesion - think central, act local
One element that has now been consolidated is Sureserve’s go-to-market strategy to minimise siloes in how it markets and sells its products while maximising opportunities for cross-selling services; a critical element of encouraging decarbonisation. The result is a recent rebrand with the 12 local providers converging under the Sureserve umbrella.
This change is about clarity and cohesion, allowing customers to fully understand the breadth of energy and compliance solutions Sureserve offers. It was a strategic choice to modernise the brand and position it as the future-thinking leader and partner of choice on the road to net zero carbon in social housing and public sector buildings.
“I’ve met customers that only know us for heating services, with no awareness that we also provide energy services, install air-source heat pumps, or solar panels. So as part of the rebranding journey, we’re putting Sureserve and the breadth of our services front and centre,” says Levinsohn.
Sureserve’s think central, act local strategy has also driven the evolution of the leadership team, with local business leaders’ authority strengthened, whilst being freed up and supported by new hires to the central team, including a Group Commercial Director, Head of Procurement, Chief Information Officer, Chief Operating Officer, and Chief Financial Officer, “to help drive value across the group.”
Building a “green skills army”
Sureserve is also investing in its wider talent strategy to ensure it has the skills to support employment in communities via the delivery of its range of services and the decarbonisation agenda. A big focus has been transitioning the workforce through its Academy, which runs 140 apprenticeships each year, and through reskilling existing employees.
“We're ensuring apprentices are trained for the future, not just current requirements,” he says. “But equally, many of our gas engineers and other specialists want to be retrained, and we support that. This is one of the areas where politicians can help by making sure policies like the apprenticeship levy are focused not just on new hires, but also retraining existing workforces, in particular those exiting armed forces.”
From PLC to PE
Before entering the private equity world, Levinsohn spent over 20 years at G4S, the multinational security company, most recently as CEO for the UK, Europe, and the Middle East. He then spent time as an advisor to private equity, working on a number of other deals, before Cap10 brought him in at Sureserve, due to his group experience.
“Often in private equity, you have a single business, but at SureServe, we have a portfolio of businesses,” he explains. “I know how to drive performance with line leaders in a portfolio, ensuring we work in a matrixed way without being too bureaucratic.”
Levinsohn has therefore been in the interesting position of moving from a PLC to a PE-backed role, in a business also transitioning from public to PE-backed. But, despite the shift in ownership structure, Levinsohn believes there are more similarities than differences between the two environments.
“Ultimately, any business, whether PLC or PE-backed, should be driving benefit for its stakeholders, including shareholders, clients, employees, and in our case, residents.” he says. “The main difference in a PE-backed business is that decision-making is faster, the business is more agile, and investment decisions move faster, although they’re just as robust.”
Balancing growth and profitability
However, he pinpoints one element that has required culture change within Sureserve; the focus on cash management.
“Cash is important in a PLC, but in a PE-backed business, it becomes part of the day job,” he explains. “When I joined Sureserve the whole incentive scheme was profit-focused, so we've shifted to having a profit piece, a growth piece, and an operating cash flow piece..”
“In PLC, organic growth is important as it is in a PE-backed business, but in PE there is a greater opportunity to drive a focused acquisition strategy. PE investors are much more comfortable with a reasonably leveraged business whereas institutional shareholders are often wary of leverage. In part, this is due to PLC needing to pay annual dividends which limits the ability to service interest payments on debt, but often this short-term dividend focus is a brake on long-term capital growth.”
Next up: Data led
With its plans for decarbonisation well underway, the next priority for Levinsohn and Sureserve is transforming the client, resident, and workforce experience, by maximising the power of data and digitalisation.
“Our vision is that if a resident has a problem, they should be able to communicate directly with us using whatever digital device and communication channel is easiest for them,” says Levinsohn. “Similarly, we want fleet scheduling and workforce management to be online, to reduce manual administration for employees. Digitalisation helps take pressure off residents, employees, housing associations, and local authorities while offering more opportunities for operational and energy efficiency savings.”
So, plenty more change, and value-creation opportunities, to come. One to watch.
